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Three Steps to Turn Your Product Idea into Money

Three Steps to Turn Your Product Idea into Money

That idea for a product that you had last year—the ultra durable dog toy for your mastiff, the self-boring tent stake that your seven-year-old could hammer into the hardest ground—boy, one of those would be really handy right now. You could sell them by the million, but what have you done about it?

You don't have a 3D printer in your basement. You've never put a product on the shelf at Walmart. How do you get that idea out of your head and into the hands of customers? Every product you have ever purchased started in the exact same place. Here are three steps that you can take to make your idea into a product that pays.

1. Protect It

There are a lot of ways to protect intellectual property. For many products, patents are a great place to start but only if you have an invention that is new or novel. Patents have to be novel—no one can ever have publicly invented, published, or used your invention before. If it is novel, you may be able to file a provisional patent application. Provisional applications lack many of the formalities of full patent applications. They also cost significantly less, making them a great first step for individual inventors.

Intellectual property includes more than patents. Any computer code you write is protected by copyright the moment you type it, though it is always a good idea to register it. Make sure to annotate your source code with a copyright notice. Include the year as well. Beyond software, copyright can protect the content on a website, the design of a non-utilitarian article, or elements of a user interface.

What if your idea is not a new app or a product on the shelf? Your world famous flatbread cheese steak sandwiches, for example, cannot be protected by patent or copyright. You may, however, be able to stop someone from calling them phlat Phillies.

A phlat philly is more than the sandwich. It's the flattened Liberty Bell logo on the wrapper and the cup of fresh daily cheese sauce for dipping or drizzling. As you build that brand, protect it with a trademark registration. Put a ™ next to that flat Liberty Bell; it puts everyone on notice that phlat philly is your trademark. Anyone can make a flatbread cheese steak, so make sure you're the only one who can make a phlat philly.

2. Validate It

Intellectual property laws exist so that inventors, authors, and entrepreneurs don't have to keep their original works secret to protect them. If someone steals your work, then intellectual property rights are what you use to get it back. With your intellectual property protection in place, start talking.

First, talk to the people you think will want to buy your product. Find out if your product or service is something they would want to buy. Find out how much they're willing to pay for it. All the intellectual property protection in the world is worthless if it is for a product or service that no one wants to buy.

Investors, licensees, and partners want to see validation that people outside of your family think your product or service is great.

3. License It

After you talk to potential buyers, talk to the partners you will need to produce your product. Intellectual property licensing is a favored business model among corporations and investors. It is efficient. Why build a factory, recruit a sales team, or rent a warehouse when there already is an existing company with everything necessary to bring your product to market? All that company needs is your product.

Companies license intellectual property, not ideas. Your intellectual property is more than your protection from potential partners if they take your idea. It is an asset that existing companies will pay to use. The way you turn that great idea into money in the bank is to collect royalties on your patented dog toy. Or to receive an annual fee to license your software code. It's your partnership in the phlat philly franchise.

Licensing isn't the only way to convert your idea into money, but it may be the most efficient.

Need to speak to an attorney about protecting your intellectual property? LegalZoom can put you in touch with an attorney who can answer your questions about intellectual property and help you decide if you need a trademark, patent, or copyright when you sign up for the business legal plan.

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LegalZoom gladly provides services to citizens of the EU wishing to start a business or protect their intellectual property in the United States. Additional costs may apply.